The McKinsey article on financial services using mobile for the people devoid of banking, referred as unbanked, (Capturing the promise of mobile banking in emerging markets) provides an interesting insight to how mobile phones can be used to integrate a wider population into banking net. Not only social inclusiveness, it also brings in a large portion of informal money into the formal system thus helping the overall macro-economic indexes of the country. There are no two opinions on how banking inclusiveness reduces the risk to the saver and the borrower.
There are successful models on m-banking which have been used across the world, especially, by M-Pesa in Kenya and Smart Money and GCash in Philippines. Please see that m-banking here refers to micro-money on mobile, something of the range of Rs 50-500 in Indian context which is uneconomic for banks of today to work with. And that is where a mobile comes in to reduce the overall cost of banking. Given, the bank penetration rate in India at less than 25% compared to mobile penetration rate at 46%, Indian market can be an ideal ground for such mobile banking for the people at bottom of pyramid.
The model as followed by m-Pesa is illustrated below –
As pointed out by mcKinsey too, for the m-banking model to succeed, the provider needs to have skills in both telephony and banking. In India, people trust and recognize the mobile brands more than bank brands. So the initiative has to be from mobile operator. Given their reach, I personally feel, BSNL, Vodafone and Airtel could be possible players in this arena. And yes, first mover advantage should definitely accrue !
And before I end, a note on some progress in this area- Nokia Money has tied up with Yes Bank to provide such services. Read here -> (http://telecomtalk.info/nokia-to-launch-mobile-payment-facility-nokia-money/19875/). More details on what is on offer is yet to be seen.
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